Johnson & Johnson ($JNJ) CEO Alex Gorsky issued a tidbit sure to whet analysts' appetite for sales, spinoffs and company breakups of any kind. J&J may sell off its Ortho Clinical Diagnostics unit, provided the price is right.
The company is in the early stages of weighing options for the unit, Gorsky said during the company's fourth-quarter investor conference. "When you look at diagnostics, we have good technology and a lot of good businesses, but they are not No. 1 or 2 in the market," Gorsky said (as quoted by the Philadelphia Inquirer).
Gorsky sounds a lot like other CEOs in sell-or-keep mode. And unit sales are the new black in Big Pharma. Abbott Laboratories ($ABT), of course, just wrapped up the spinoff of its pharma business, AbbVie ($ABBV). Pfizer ($PFE) just priced an IPO for its animal health unit, Zoetis, and is in the middle of selling its nutrition business to Nestle. And analysts are keen for Pfizer to hive off other businesses as well.
Goldman Sachs analyst Jami Rubin, who's been championing a full-scale Pfizer breakup, would like to see J&J do the same. She's advocating a three-way split, saying J&J's diversified structure is holding the company back. So, selling off the diagnostics unit could get the break-up-J&J chatter going again. Gorsky, however, has said he's not interested in a Pfizer-style split-up or a two-way divorce a la Abbott/AbbVie. Selective sales? Obviously, that's a different story.
- read the Inquirer story
- check out FierceMedicalDevices' take